Farmers involved in a Farmers for Free Trade virtual roundtable panel Oct. 14 representing corn, pork, beef and dairy farms, all supported a more multilateral approach to trade such as reentering the Comprehensive and Progressive Agreement for Trans-Pacific, the predecessor to TPP. An inward approach could leave U.S. producers behind as others continue to work on advancing trade deals.
Darci Vetter, former U.S. agricultural trade negotiator during the Obama administration and active in negotiating the agricultural provisions of the Trans-Pacific Partnership, moderated the discussion which highlighted the need for this Biden administration to be proactive in negotiating additional market access for agricultural markets in order to not fall behind.
Joseph Glauber, senior research fellow at the International Food Policy Research Institute and former chief economist at USDA, explains that over the past three decades exports of U.S. agricultural products have soared, especially for meats.
For instance, in the 1990s, only 6% of poultry was exported, while now it is 16-17% of total production exported. The U.S. previously was a net importer of beef. Now as markets open up in Asia, exports of beef increased from 4% to over 12% in recent decades. Pork’s story is staggering, going from just 2-4% of domestic production exported to currently over 25% of pork. Dairy previously dumped surplus product on the world market, and exports account for over 16% of total milk solids production in 2020.
Southeast Asia, which had many countries participate in the now CPTPP agreement, offers huge market potential for U.S. ag exports. And with the news that China, United Kingdom, Korea and Taiwan are seeking entry into that agreement, it could be even more important for the United States to also be at the table.
Howard “AV” Roth, Jr., National Pork Producers Council past president and fifth-generation farmer who owns and operates Roth Feeder Pig, Inc. in Wauzeka, Wisc., says when CPTPP went into effect in Japan, pork producers started losing market share quickly. Although the Trump administration was able to broker a mini-deal with Japan to minimize those losses, other countries could quickly take growth potential away from U.S. producers in the Southeast Asia region.
Roth says it is imperative the administration focus on expanding markets, especially in Southeast Asia. Vietnam unilaterally lowered tariffs on pork, and since then U.S. pork exports increased by 150% in the first seven months of the year. Although the market access victories are important, Roth says we should focus on re-entering the CPTPP and encourage the administration to enter into broader market access negotiations.
Those looking to get into CPTPP are huge markets for pork producers, Roth explains. “We need to be there with our competitors.” As these rules are getting formed, Roth says it is important for the U.S. to be at the table as additional countries come in.
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Vetter says from her experience in being a negotiator during the TPP, one of the things discussed was the ability for the multilateral agreement to be a magnet. Other countries see the benefit of being part of that “club” to get the tariff benefits, and they are willing to adopt some of these rules on labor, environment, intellectual property and protection.
“That magnet seems to be working, but we are not currently inside,” Vetter says.
Glauber says the idea of going country to country and trying to counter the market access shortfalls dealt to the United States by not being in the CPTPP as done with Japan will be very timely. He hopes the Biden administration starts looking outward and looking for potential re-engagement in the region. We were very instrumental in creating the architecture for TPP, which now has become the CPTPP.
“I think it may take a little while for the administration to start doing that, but hopefully within the next year or so we’ll start seeing some move in that way,” Glauber says. “Otherwise, I think you risk really falling behind.”
Doug Chapin, Michigan dairy producer and chairman of the Michigan Milk Producers Association, says that American exporters are facing an increasingly uneven playing field as the European Union and New Zealand continue to ink new trade deals with key markets while the United States falls behind.
“Aside from the USMCA update to NAFTA, the last new U.S. free trade agreements went into effect nearly a decade ago with negotiations having taken place even earlier than that,” Chapin said. “We seem to either be evaluating or at times negotiating deals, but not implementing new comprehensive trade agreements that eliminate tariffs on our exports.”